Companies can turn to a variety of experts — like interactive agencies and customer experience transformation consultants — for help with improving or innovating the customer experience. But despite years of experience and a thriving professional network, one type of expert remains virtually unknown to customer experience professionals: the service design agency. Customer experience professionals should seek out service design agencies because:

Service designers tap into the power of human-centered design. Unlike customer experience firms that take an approach akin to management consulting, service design agencies leverage human-centered design practices like ethnographic research, co-creation, and low-fidelity prototyping. The combination of these practices enables service design agencies to more quickly — and cheaply — identify the real customer and corporate problems that they need to address and develop effective solutions. These activities also serve as potent communication vehicles, exposing assumptions and marshaling early buy-in from employees and stakeholders.

Business-to-consumer (B2C) financial services provider Ally Bank and business-to-business (B2B) professional services firm PwC Australia took home top honors in the design category of Forrester’s first annual Outside In Awards. In our recent report, Amelia Sizemore and I describe how — despite vastly different business models and target customers — Ally and PwC followed strikingly similar approaches: human-centered design processes that involved a collaborative kickoff stage, extensive research, contributions from customers and multiple parts of the business, and numerous iterations of prototyping and testing.

Ally gave itself just nine weeks to design and test its new mobile banking app. Incredibly, team members managed to involve customers during seven out of the project’s nine weeks.

After an initial round of customer interviews, the team asked 10 mobile banking customers to complete a two-week diary study. Participants noted the financial activities they needed to accomplish and sent in photos of places where they wanted — but weren’t able — to bank. Next, the team conducted informal tests of its initial sketches and paper prototypes with a new group of customers. Finally, the team brought yet another group of customers into its usability lab for formal prototype testing.

In 2011, the executives at Bertucci’s, a 30-year-old restaurant chain in the US Mid-Atlantic and New England regions, faced a big problem: The restaurant had become nearly invisible to younger generations of diners. Bright lighting and rows of faux-leather booths beckoned parents with messy young children — not ever-shifting groups of young friends on the move. And its traditional table service felt increasingly irrelevant for diners who wanted to get in and get out — or park themselves for hours with a laptop.

Bertucci’s saw that it had to throw out its old restaurant model in order to court (and keep) a younger generation of diners. Rather than rework its existing locations, the executive team decided to create an entirely new brand. “What we wanted to do is cut the competition off at the pass,” says James Quackenbush, chief development officer of Bertucci’s.

Partnering with design and innovation consultancy Continuum, the firm created a new restaurant concept called 2ovens. The success of the pilot restaurant demonstrates the power of following a structured approach to customer experience innovation.

The survey is now closed. Many thanks to all of the agencies and service designers who submitted. We'll be in touch soon.

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The survey deadline has been extended to November 7 at midnight Eastern! Please see my comment in the thread below for more details.

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“Who can help us design great customer experiences?” I increasingly hear this question from our Forrester clients — and depending on what kind of work the client is after, my answer is often, “a service design agency.” I recently wrote two blog posts discussing the importance of service design and its relationship to customer experience. In December, I’ll be publishing a report that will help prospective clients find potential service design partners.

This report will focus on agencies that design service-based interactions that span the following steps in the customer journey: buy, access, use, and get support. Agencies that primarily design the employee experience will also be considered for inclusion in the report. If that sounds like your agency — and you’ve got one employee or several hundred — we’d love to include you. Just fill out this survey by November 1.

Service design is critical to customer experience (CX). (If you’re not sure why, please check out my post from earlier this week called "Service Design: The Most Important Design Discipline You’ve Never Heard Of," and then come back and continue reading.) But what exactly is the relationship between the service design and CX? And how does the field of user experience (UX) factor into this picture?

User experience primarily focuses on the design and development of digital interactions. Today, this typically means websites, mobile phones, and tablets, but UX can also include touchpoints like kiosks, desktop software, or interactive voice response systems.

Customer experience focuses on the design, implementation, and management of interactions that happen across the entire customer journey. This includes the interactions that take place as customers discover, evaluate, buy, access, use, get support, reengage, and leave.

As the image below shows, I believe that all UX work is a subset of CX work. Customer-facing digital touchpoints are by definition part of the CX, and employee- or partner-facing digital touchpoints either directly or indirectly affect the customer experience in some way.

Service design, like customer experience, focuses on the design and implementation of interactions that happen across the entire customer journey. Service designers also design the behind-the-scenes activities that enable those experiences to be delivered as planned.

Today is the first annual Customer Experience Day! There’s a growing number of professionals who are dedicated to making great customer experiences — and today is a day to celebrate their work. Today I’d also like to celebrate the role of design in helping customer experience (CX) pros create those experiences. It's not graphic design, interior design, or industrial design — but the lesser-known field of service design. You may not have heard of service design yet, but I’d argue that it’s the most important design subspecialty in the business world today.

What is service design? Its purview includes the design of interactions that span time and multiple touchpoints. Service design is sometimes easiest to grasp when contrasted with product design. Product designers create tangible things: tennis shoes, teapots, and tablet computers. Service designers create intangible experiences: the series of interactions that you have as you book a flight, pay a bill, get a driver’s license, or go to the doctor. Service designers also design the behind-the-scenes activities that enable those experiences to be delivered as planned.

In July, I delivered a webinar about customer experience innovation. I explained that in order to create innovative experiences that drive differentiation and long-term value, companies need to triangulate on consumer needs, the business model, and the brand. I received several great questions during the call, and I thought it would be worth answering them again (in brief) here:

How many companies are following that process of developing customer experience innovation?

Unfortunately, not as many as I’d hope.

In Forrester’s recent survey of 100 customer experience professionals, 69% percent of respondents reported that their companies have dedicated personnel for customer experience innovation. Sixty-four percent have allocated time to innovation activities. And 55% have dedicated innovation budgets.

These numbers sound promising — but they just don't add up. In 2013, only 8% of the companies in Forrester’s annual Customer Experience Index received a top grade from their customers — and that's a pathetically low number in comparison to the amount of professed innovation in the industry.

Companies seem to be missing the point about aligning innovation efforts with consumer needs, business model, and brand — and that’s what keeping many from differentiating.

Is it possible that “staying with the lines” of the current business model or corporate brand squashes innovation?

Each year, SXSW crowdsources part of its programming. For 2014, eight Forrester analysts have proposed presentations based on our current and upcoming research. If you’d like to see any of these presentations at SXSW, we’d love your vote. It’s easy: After a quick sign up, just follow the links below and give these sessions a thumbs up. Voting ends this Friday, September 6 at 11:59 PM CT. Thanks for your support, and we hope to see you in Austin!

Of course, I’m not the first person to say these words. That’s how JFK kicked off his man on the moon speech in May 1961. He also said (slightly paraphrased), “We choose to go to the moon in this decade — not because it is easy, but because it is hard.” It’s an inspirational line, but come on. The real reason that JFK decided to put a man on the moon wasn’t because it was difficult. It was because just one month earlier, Yuri Gagarin — a Soviet! — had become the first man to go into space. Putting a man on the moon wasn’t just some lofty scientific experiment. It was a battle between democracy and communism. It was a mission to win the hearts and minds of Americans and of people all over the world.

To achieve this mission, NASA needed to innovate.

One of the most critical things it needed to develop was a spacesuit that would keep the astronauts alive on the lunar surface — and for many years, NASA thought it was going to get its innovation from science fiction. The organization, for example, built many spacesuits with hard exoskeletons that made the astronauts look like manly, rugged bad asses.

But the real space suit innovation didn’t come from science fiction. It came from women’s underwear.

One company, Playtex, was thinking about the spacesuit opportunity differently. Playtex executives saw how they could combine the latex in their girdles with the nylon tricot from their bras to create a protective layer that could hold up to harsh demands of space.

Firms crave differentiation. But the truth is that even companies with dedicated time and budget for customer experience innovation focus most of their efforts on two things — whatever their competitors are doing and whatever the latest technology enables them to do. When companies blindly add shiny new features or trendy technologies to their mix of customer experiences, they’re innovating just for innovation’s sake.

To shed scattershot innovation efforts that produce little business value, customer experience professionals must examine their business challenges and associated opportunities in a different way — from the outside in. This first and vital step in the innovation process requires immersion in customers’ lives. The end goal? Developing empathy for your customers so that you can discover their unmet needs.

Someone who really understands this is Doug Dietz of General Electric Healthcare (GE Healthcare). Doug had been designing CT and MRI scanners at GE Healthcare for 20 years. As a product designer, he concentrated mostly on the aesthetics and the ergonomics of these machines, or what he calls “the shiny objects.” He was incredibly proud of these shiny objects. And he had good reason — on hospital visits, technicians would shower him with compliments.

But Doug’s machines didn’t so well work for one key customer segment: little kids.

On one particular visit to a children’s hospital, Doug watched a little girl walk in, holding her parents’ hands. She took one look at the MRI machine, which Doug had been so proud of just moments before, and she started to cry. Doug learned that a huge percentage of children get so panicked about their procedures that they actually require sedation. He says, “I thought to myself . . . I’m kind of a failure.”